Final US audit of Iraq Reconstruction Says Billions Wasted

We all know the feeling. You have a great time on vacation and then come home to see the Visa card bill. What were we thinking? Did we really spend that much on dinner? Who did we think we were buying drinks for the whole bar the last night?

Well, the US Department of State just had the same experience, only with the filed reconstruction of Iraq and a bill of some $55 billion.

In what it called its final audit report, the Office of the Special Inspector General for Iraq Reconstruction (SIGIR) on Friday spelled out a range of accounting weaknesses that put “billions of American taxpayer dollars at risk of waste and misappropriation” in the largest reconstruction project of its kind in US history. “The precise amount lost to fraud and waste can never be known,” the report said.

Here’s where I can help. I do know the precise amount lost to fraud and waste: all of it. Every freaking penny. Every dollar spent on Iraq that was not spent on Scranton, Detroit, Cleveland or New Orleans.

To be fair, the inspector general said that while he couldn’t pinpoint the amount wasted, it “could be substantial.”

A key weakness found by the inspectors was inadequate reviewing of contractors’ invoices. In some cases invoices were checked months after they had been paid because there were too few government contracting officers. They found a case in which the State Department had only one contracting officer in Iraq to validate more than $2.5 billion in spending on a DynCorp contract for Iraqi police training. “We found this lack of control to be especially disturbing since earlier reviews of the DynCorp contract had found similar weaknesses.”

In that case, the State Department eventually reconciled all of the old invoices and as of July 2009 had recovered more than $60 million.

$60 million out of $55 billion dollars. It’s s start right, just like jumping up brings you theoretically closer to the sun. Luckily, the over $66 billion and counting already spent on reconstruction in Afghanistan isn’t being wasted as it was in Iraq, going instead to buying chocolate unicorns and fluffy rainbows.

Recent Comments

Donny said...

1

Does anyone at State read these IG reports for any reason other than to black out the embarrassing parts? Embassy Islamabad’s recent unedited report called for the dismissal of the Management Counselor. The releasable to the public version has blacked out every single mention of her ineptness. Fraud, waste, and abuse is rampant, the IG has pointed it out, yet the country team keeps business as usual. The DCM can’t even remove the management counselor (that the IG said he’d have removed on the spot if she’d been in country) because Pat Kennedy says she has a stellar reputation in DC. Never mind that the very crew she recruited is curtailing left and right.

One of State’s (many) ongoing problems is that loyalty is valued over competence. People who are not good at their jobs, but suck up properly to their bosses, are rewarded. Hence, the situation you describe is common place.

There is something mentioned here: “A key weakness found by the inspectors was inadequate reviewing of contractors’ invoices. In some cases invoices were checked months after they had been paid because there were too few government contracting officers. They found a case in which the State Department had only one contracting officer in Iraq to validate more than $2.5 billion in spending on a DynCorp contract for Iraqi police training. “

It is key to have responsible State officers overseeing the contracts – but there are deficiencies in State’s contract system that foster the abuses:

– I’m not sure how the foreign service does this BUT there is a policy that employees with contractors must wait a year from leaving their positions with the contractor before taking a civil service job at State. ECA Bureau’s HR would ROUTINELY allow the hiring of contractors who went immediately from their positions with the contractor into State civil service jobs. Importantly, these contractors often came from the very organization a former political appointee DAS at ECA Bureau had managed and which his organization garnered almost $1 billion dollars in contract monies for managing these ECA programs

– ECA/EX knew that there was a prevalence for newly-hired civil service staff, mostly in their 20s, to be shown the door and fired, just shy of their first year in government service because no reason is required when terminating such new hires. An ECA/EX official in the presence of a State union representative said they were aware of a high number of civil service new hires experiencing this, but couldn’t but couldn’t take any action on it. We famously had a young American woman, hired less than a year from working at the contracting organization our ex ECA DAS had managed, who had a Middle east studies degree and Arabic skills, but who was denied permission to work a year in Iraq — at the same time then Secretary Rice had called for State employees to go to Iraq – remember that?? This ECA/A/E employee was told she could not go work in Iraq, no reason provided, and became incensed when this woman asked NEA Bureau to help convince our section to let her go to Iraq owing to critical need. This woman was then rebuked, told she embarassed the DAS’s office, and there was NO future at State for her — she was dismissed because she wasnt there quite a year and no reason required. The official party line of course was this woman wasnt qualifed – which was sheer bonk and smoke-and-mirrors.

– Contractors used to be favoured over civil service staff, and it was common practice for civil service in parts of ECA Bureau to be warned NOT to do their jobs or that they were “too into” their jobs. Often contractors would call over the head of civil service staff to supervisors – and some supervisors at State came from the very same contracting organization that was supposed to be delivering the program. Civil servants who tried to lobby for the program were then accused of being deficient and suddenly found their portfolios dried up

– Cooperative grant programs were operated like grant programs, and civil service officers attempting to carry out their duties faced intimidation and harassment for doing so when issues of concern arose